When Wall Street Wins, The Economy Loses

When Wall Street Wins, The Economy Loses

Mainstream political thinking holds that a nation’s economic fortitude relies on an ever-expanding financial sector. But new research disputes the notion. In a new paper titled “Why does financial sector growth crowd out real economic growth?” authors Stephen Cecchetti and Enisse Kharroubi show that when banking blossoms, the “real” economy withers. To see the way the…